This Policy Analysis Exercise seeks to make policy recommendations to the Clinton Climate Initiative (CCI), on the deployment of electric vehicle (EV) charging infrastructure in C40 cities - a group of the world’s largest cities, which have committed to take action on climate change by reducing greenhouse gases, including from the transport fleet. The C40 Electric Vehicle Network (C40 EVN) is a C40 initiative to facilitate the successful introduction of EVs through collective municipal actions including planning and deployment of charging infrastructure, streamlining permitting processes associated with charging infrastructure, providing monetary and non-monetary incentives and mobilizing demand for EVs in city fleets.

CCI had requested us to undertake analysis and make recommendations on the deployment of EV charging infrastructure in C40 cities. This analysis included understanding potential barriers (policy, technological, economic, etc) to the deployment of EV charging infrastructure, understanding how various cities were approaching the issue, and the policy levers that cities could employ in increasing the availability of EV charging infrastructure. Based on this research, we have made a series of recommendations on policy actions that cities can take to increase the deployment of EV charging infrastructure.

This paper is a Policy Analysis Exercise by students at the John F. Kennedy School of Government, Harvard University. This research was supported, in part, by the Ash Center for Democratic Governance and Innovation at Harvard Kennedy School.

Key recommendations

1. Cities should design EV strategies / programs that are unique to their individual circumstances, objectives and players, but should draw on lessons from peer cities

Different cities across the world face different circumstances (in terms of parking availability, etc) and different objectives with regard to EVs. Cities with high percentages of private off-street parking, should focus mainly on setting a regulatory framework conducive for investment in charging infrastructure networks, increasing EV deployment by switching public fleets to EVs and leveraging city-owned real estate to speed up infrastructure deployment. Cities with low levels of private off-street parking can expect to see a significantly lower EV uptake, due to less favorable economics – and might be forced to subsidize on-street residential charging infrastructure if they want to speed up this process. Cities also have differing objectives for EV deployment. For industry development purposes, small test-runs with the latest technology seem appropriate, whereas wide-spread adaptation required to achieve an environmental impact will require more elaborate planning, coordination between public and private stakeholders, public awareness campaigns, investment in charging infrastructure, and the use of proven technologies. Each city will have to develop its own strategy based on its unique set of objectives connected with EVs and Policy options for electric vehicle charging infrastructure in C40 cities | R. Philip & A. Wiederer 6 charging infrastructure. There is also immense value from sharing lessons about what works and what doesn’t in regard to charging, across cities, to overcome information deficiencies

2. City governments have limited resources to mitigate up-front EV cost but can use other policy levers to affect TCO of EVs

The upfront cost of EVs is the single biggest barrier to adaptation / deployment of EVs. However cities have limited means at their disposal (if any) to influence upfront EV cost, but have other instruments at their disposal which affect the TCO of EVs and therefore enter into the overall value equation of an EV from a consumer’s perspective. The most prominent levers are waiving congestion charges & parking fees, providing electricity discounts, etc

3. Cities should use their regulatory influence smartly to create a conducive environment for private investors of charging infrastructure – and only provide subsidies under specific circumstances

There are several regulatory barriers to the deployment of EV charging infrastructure including permitting of charging infrastructure, the lack of a technical standard for charging infrastructure, policy uncertainty regarding sale of electricity, regulation regarding EV-related investment by utilities, etc. Cities which face these regulatory barriers should address them as early as possible by building political consensus and then mandating the relevant government agency to address each issue whether it be modifying building codes, streamlining permitting, deciding a standard in consultation with OEMs, etc. As mentioned in Chapter 4, city governments hold a comparative advantage in zoning and building codes and permitting, and they should use those levers to good effect. Cities should use their regulatory influence smartly to remove / mitigate barriers to create a conducive environment for private investors. This report also shows that perse a direct subsidy to private infrastructure providers is not required because charging networks offer a viable business opportunity – the notable exemption being cities with large proportions of on-street residential parking where residents might be undersupplied with charging infrastructure as the economics under those conditions are less appealing. Another circumstance where city investment might be necessary is the case of very high demand uncertainty – under these circumstances cities can also consider running pilot projects or demonstration projects for proof of concept, which if proved economically viable, can then subsequently be sold to the private sector

4. If cities or city utilities do offer charging infrastructure services, there is a strong case for subscription fee based business models to gain consumer acceptance

Policy options for electric vehicle charging infrastructure in C40 cities | R. Philip & A. Wiederer 7 Two key insights emerge from the analysis of the economics of public charging infrastructure. First, from a pay-per-use perspective, the mark-up required to make the infrastructure economically feasible might look prohibitively expensive to consumers. Second, annual subscription fees required to finance a network would be, even under conservative assumptions, appear modest and in line with amounts consumers are prepared to pay for other services. To make consumers accept public charging and allow for a profitable charging infrastructure business, there is a strong case to push for subscription fee models

Cities which run / own the charging infrastructure themselves (or by city owned utilities) should therefore have subscription-fee based business models

5. Cities should be aware of technological uncertainties and not commit prematurely

There are significant technology barriers and uncertainties that exist. EV battery swap technology and smart grid technology, for example, have generated tremendous media and investor attention, but our research show concerns regarding these technologies. The EV industry is young and highly dynamic, and changes in technology while the industry matures are likely. However, for the key components of charging infrastructure, like Level I, II and III charging, the norms have been set and it appears to be safe for cities to commit to these standards now. Slowing down EV adaptation for certainty regarding smart grid technology does not make sense. If a particular smart grid application in the future makes economic sense, it will generate economic returns that allow for the charging infrastructure to be updated. The argument that the smart grid is required for the charging infrastructure’s economic viability is not supported by the analysis in this report – and also not by the reality of public and private sectors currently investing in charging infrastructure without any smart grid component

The authors believe that taking these seven recommendations into consideration, cities can increase their likelihood of a successful and rapid adaptation of EVs. EVs are a reality, and during the next decades there will be a significant uptake of EVs on streets around the world. Cities that want to actively steer this development have to act decisively and comprehensively.